Lawsuit Against Lenders in Massachusetts Has Big Potential
December 27, 2011
Progress on the legal challenges in Massachusetts against the five biggest mortgage lenders in the country is a positive sign for homeowners who are seeking relief from foreclosures. This was revealed by Vito Torchia, Jr., the managing attorney of Brookstone Law.
According to media reports, in the first such suit filed by a state, the Attorney General of Massachusetts, Martha Coakley, claims that Citigroup Inc., JPMorgan Chase & Co., Wells Fargo & Co., Bank of America Corp. and GMAC Mortgage used false documentation during the foreclosure processes. Coakley also claimed that they foreclosed on homes without showing proof that they owned the actual mortgages and they also failed to uphold the loan modification promises to borrowers in Massachusetts.
This move of the Massachusetts AG earned praise from various sectors. Vito Torchia, Jr., said, “We applaud the Massachusetts attorney general for finally coming to the aid of foreclosure victims and holding banks accountable for their systematic mismanagement, lack of due diligence and ongoing record of foreclosures without following the rule of law.”
Observers say that the action of the state represents a new legal challenge against the mortgage industry by intensifying the pressure on banks to enter into a settlement with a coalition of Attorneys General who are seeking relief for consumers that have been allegedly wronged by flawed mortgage servicing practices. The lawsuit could also become a blueprint for other states to file separate actions.
Torchia, said, “This case could have significant repercussions throughout the nation and especially in California, where our Attorney General has just begun to focus on the harm banks have done to homeowners in our state.”